By the time investors in his proprietary TDFs reach their glide path, assets have been transitioned nearly exclusively to cash and Treasury inflation-protected securities. A minimal allocation — never more than 5 percent, says Surz — remains in equities. 

That makes for a markedly different approach from how some of the biggest fund managers leverage risk in their proprietary TDFs. For comparison, he points to TDFs offered by the "big three" service and fund providers — Fidelity, T. Rowe Price and Vanguard. 

In a white paper he recently produced, and is hoping gains traction with plan fiduciaries and their advisors, Surz presents data showing TDFs from the three providers each holding more than 50 percent in stocks at the termination of the glide path. 

Others hold more, he says. All present real fiduciary conflicts for sponsors that Surz thinks will motivate the next generation of participant claims brought under the Employee Retirement Income Security Act. 

"There is no fiduciary upside to taking risk at the target date," said Surz in an interview. "Only downside." 

"Fund companies are selling products and plan fiduciaries are not doing what they need to do, which is to provide solutions in the best interest of plan participants," he said. 

Surz describes an industry that is rewarded by overweighting assets in equities, even as target dates approach and arrive. 

He claims the evidence is clear: funds raise equity exposure in direct response to investment returns and fund performance. 

That helps attract better ratings from Morningstar, he said. 

It has also made TDFs more expensive for investors and lucrative for providers, he thinks. 

"It's simple. You can charge more to run equities than bonds," he said. "There are plenty of equity funds where providers can get north of 100 basis points." 

The upshot to Surz: Most plan participants are paying too much in fees for TDFs that expose them to far too much risk. The consequences have been hidden by the multi-year bull market in stocks. But some day the other shoe will drop, he says. And when it does, it won't be pretty for plan sponsors. 

He does not blame fund companies, whose job is to make money, he says. "I blame the fiduciaries for not doing their jobs." 

So where was the wave of class action claims after the 2008 crisis? TDFs have been subject to fee litigation, but one could hardly argue there was a wave of claims asserting imprudent asset allocation and sponsors failing their fiduciary obligation to monitor as much. 

In Surz's view, which he says he's drawn after putting those questions to prominent ERISA attorneys, the legal industry wasn't "ready" for claims against the prudent management of assets in TDFs. 

Fee cases were carving out a new area of employment and labor case law, and the plaintiffs' bar continued to bring fee claims that had proven litigation models. 

"They wanted to make money," said Surz, matter-of-factly. 

Inevitably, when the next market correction comes, those same attorneys will turn their questions to the prudence in overweighting target date funds with equities, he thinks. 

But what about underweighting risk. Is it not conceivable for sponsors to be subject to fiduciary risk for choosing products that offer next to no equity exposure running up to retirement? 

"I think that argument is lame," says Surz, wondering aloud whether anyone remembers the lessons of 2008.